Tax Compliance Attitudes in Africa: Does Foreign Aid Promote Human Development? Evidence from South Asian Countries

Ranjan Kumar Dash and Deepa Jitendra Gupta ()
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Ranjan Kumar Dash: Symbiosis International (Deemed University)
Deepa Jitendra Gupta: Symbiosis International (Deemed University)

Journal of Economic Development, 2023, vol. 48, issue 3, 111-130

Abstract: This research examines the efficacy of foreign aid in promoting human development in South Asian countries from 1990 to 2019. The study uses panel data analysis (cointegration, causality, and the GMM-system model) to assess the efficacy of foreign aid on human development. The study also examines the role of the conditioning factor in the interplay between aid and investment. Overall, the findings of this paper show that the effects of aid on human development are: directly negative and indirectly positive for three channels (trade, infrastructure, and corruption). Further, the study finds one-way causality from human development to foreign aid, indicating that higher human development attracts higher aid, not vice-versa. Therefore, by following open oriented trade regime, improving infrastructure facilities, and reducing corruption, aid effectiveness could be enhanced for South Asian countries.

Keywords: Aid; HDI; South Asia; Panel Data; Causality (search for similar items in EconPapers)
JEL-codes: F35 F50 O55 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jecdev:0067

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